Apple cannot ban links to outside App Store payments, U.S. appeals court says

By Stephen Nellis

(Reuters) -A U.S. appeals court on Monday upheld a federal court’s order that could force Apple Inc to change payment practices in its App Store.

Apple said it may appeal the decision. The U.S. 9th Circuit Court of Appeal upheld a 2021 order in an antitrust case brought by “Fortnite” creator Epic Games that could require Apple to allow developers to provide links and buttons for third-party in-app payment options and avoid paying sales commissions to the iPhone maker.

Apple shares ended the day up slightly at $165.33. The appeals court sided with Apple on nine other matters in the case, agreeing with the trial court that Apple’s App Store rules do not violate antitrust laws and allowing its commissions of up 30% for in-app payments to stand.

“For the second time in two years, a federal court has ruled that Apple abides by antitrust laws at the state and federal levels,” Apple said in a statement. “We respectfully disagree with the court’s ruling on the one remaining claim under state law and are considering further review.”

Apple did not say whether it planned to appeal to a larger group of judges on the 9th Circuit or to the U.S. Supreme Court. The company has 14 days to file its appeal. The trial court’s orders will remain paused while any appeals unfold.

In a statement, Epic conceded that it lost on its antitrust claims, but said the trial court order “frees iOS developers to send consumers to the web to do business with them directly there. We’re working on next steps.”

While Epic lost at trial on most of its allegations that Apple violated antitrust laws, the trial judge did find that Apple violated California’s unfair competition laws by barring developers from telling users about other ways to pay.

The trial court judge said Apple could no longer ban links and buttons to third-party payment options. But unlike competition authorities in several countries, the trial court judge gave no instructions on the manner in which Apple must allow those links or buttons, leaving open the possibility of future legal battles over how the changes must be made.

The appeals court said the trial court’s order to Apple to change its behavior was appropriate because it would be too difficult to put a price on the damages the Apple’s rule caused to Epic.

“The district court did not clearly err in finding that Epic suffered an injury for which monetary damages would be inadequate,” the 9th Circuit wrote on Monday.

Apple has been forced to open up its in-app payment systems by competition authorities in other countries such as South Korea, the Netherlands and Japan.

(Reporting by Stephen Nellis; Editing by Jonathan Oatis and Bill Berkrot)